Insight
How should a founder respond to an unsolicited buyer approach?
The first response sets the terms of everything that follows.
The short answer
An unsolicited approach is not an offer. It is an invitation to begin a process the buyer controls. Before responding substantively, a founder should understand what the approach is testing, what information to release and when, and what the business is worth independent of the buyer's framing. The first response shapes the negotiation that follows. A review establishes value, readiness and process options before the founder engages, so the response is deliberate rather than reactive. The aim is to protect optionality, not to close or reject quickly.
When this matters
- An inbound approach from a strategic buyer or competitor.
- A casual meeting that is really a probe.
- An indicative number offered before any diligence.
- Pressure to sign an NDA or grant exclusivity early.
- A board asking how to respond.
What gets tested
- Whether the approach is genuine or information gathering.
- Independent value against the buyer's opening anchor.
- What diligence would expose about the business.
- Founder and shareholder alignment on whether to sell at all.
- Process options, from a bilateral discussion to a competitive process.
- The cost of granting exclusivity.
Common problems
- Releasing information too early.
- Anchoring to the buyer's first number.
- Granting exclusivity before testing the market.
- Treating one approach as the only path.
- Founders and shareholders misaligned on selling.
What the review produces
An independent view of value and readiness, the risks in the approach, and a response strategy that keeps options open while the company decides on its own terms.
Related review
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Discuss a decision
PHCA works with a limited number of companies at any one time. Enquiries are most useful where there is a defined decision, a clear timing issue and a need for independent judgement before the company proceeds.